Do Global Distribution Systems Have a Future?
By Peter J. Bates
Tuesday, 12th December 2023

As we look back on 2023, there is much to celebrate: Travel has rebounded in a big way, and we’ve whetted consumer appetites for continuing to explore the world, whether it’s to have unique experiences, spend time with loved ones, or see Taylor Swift.

For many of us, an increase in revenues has provided the opportunity to reinvest in our businesses and make them more resilient for the future.

That said, beneath the surface is an infrastructure that seems to be at risk of splintering. I’m talking about Global Distribution Systems, the vast computer networks that display real-time inventory from airlines, hotels, cruise lines, and more, and allow travel agencies to find and book it.

The major GDS’s, Sabre, Amadeus, and Travelport, process millions of transactions per day. But they are seen as legacy technologies — Sabre, for instance, was created in the 1950s by IBM and American Airlines. And like other legacy technologies (think combustion engines or Microsoft Office), they can be slow to innovate.

That’s why we’re seeing so many other new booking tools cropping up — particularly the New Distribution Capability system (NDC), which major airlines initially saw as a way to bypass the GDS’s and market fares directly to agencies and consumers, and also bundle seat upgrades, checked bag fees, and other products together with airfares. As part of its shift to NDC, American Airlines recently removed a whopping 40% of its fares from the GDS’s and is gearing up to remove more.

Also missing from the big platforms are the many hotel “preferred partner” programs with exclusive rates and other products. I hear more and more about younger agents who don’t want to train on a complicated old system and find it faster and easier to book directly with suppliers.

So, when I learned that my old friend Chinmai Sharma had been named Global Head of Lodging, Ground & Sea for Sabre, I thought it would be interesting to explore what he is doing to address such concerns. I wanted to ask Chinmai, who spent many years at companies like Expedia, Wyndham, Starwood Capital Group, Taj Group, and RateGain, whether — and how — Sabre and other GDS’s will remain relevant. Can it evolve as quickly as the rest of the industry?

But first I spoke to a number of luxury travel advisors, who voiced a wide range of opinions on Sabre and other GDS’s. Some were quite positive. “Sabre is sitting on the best collection of content out there for luxury,” said Paul Tumpowsky, founder and CEO of Skylark, which handles both online and offline bookings.

“The interface feels archaic, but it’s the only solution out there that is feature-complete — meaning that it handles everything from shopping and booking to confirming and collecting commissions. NDC can’t do everything: You can’t book a child airline seat, for instance, and if you want to change or cancel a flight, you have to call American. For as much as you may not like one particular piece of Sabre, the whole thing is strong.”

Michael Holtz, Founder and CEO of SmartFlyer, agreed that Sabre is the best solution for most travel advisor tasks. “A lot of relatively new advisors don't want to use Sabre because they think it’s outdated. They’re wrong. It's like going through life and not knowing how to use Google — are you going to drive to the library every time you want to look something up? You don’t have to be a Sabre guru to do a simple search and look up, say, how to fly a client from Boston to Singapore.”

But Holtz agrees that Sabre is missing some key content, including some hotel preferred programs and NDC fares. “You can get better content on the hotels’ own sites now than what Sabre gives. They need to figure out how to incorporate everything the suppliers are putting in their own distribution channels so it’s visible to agents. If you're not relevant, you go bye-bye. But if you are relevant, you thrive.”

Some agencies have created their own technology solutions to cope with what they see as the shortcomings of GDS’s. “We have our own booking platform,” says Keith Waldon, Founder & Director of Departure Lounge. “It does connect to Sabre out of necessity because we're in 33 different preferred agency programs and Virtuoso, and the only way to book them is through a Sabre rate code. So our modern platform, which is super cool and fast and easy, connects to Sabre, which is very limiting — it’s like having a modern house that’s tied to ancient plumbing.” He cites issues like the inability to book multiple rooms under one name, or Sabre only conveying the name of the agency, not the individual booking agent. “This is 2023. Sabre needs way more than a few tweaks — it needs to be blown up and completely replaced with modern technology.”

That’s unlikely to happen: For one thing, it would take the entire industry to agree on a new technology standard — and pay for it. Chinmai assures me these and other issues can be resolved incrementally. “We exist to solve their problems, and we’ll continue to focus acutely on doing that. Our goal is to be the premier B2B travel platform for the industry. Our innovation is also dependent on the pace of tech transformation of our hotel suppliers and our travel agency partners. We can’t innovate in isolation as the whole ecosystem needs to evolve.” He points out that Sabre’s advisory boards with both partners and travel advisors ensure that their product pipeline remains relevant. “We'll continue to enhance their shopping experience and give them as much visibility as needed.”

Chinmai’s primary focus right now is solidifying Sabre’s position in the hotel category. He says the platform contains nearly one million hotels with direct contracted rates, and that additional content, whether preferred rates, other hotels, or alternative accommodations like rentals, can be pulled in via Sabre’s aggregator partners. “My immediate task is to make sure that all the relevant supply — wherever travelers may want to go — is available on our platform. And on the travel agency side, we have to make it as easy as possible for agents to use the technology, so they can do what they do best.”

Chinmai also says that Sabre is working on accommodating the type of bundled products that airlines and, increasingly, hotels are bringing to market. “We continue to enhance our APIs [software interfaces] with the supplier community, meaning that whenever hotels, car rentals, cruise, or rail companies come up with new capabilities for merchandising their product, we upgrade our APIs accordingly. For the travel advisor community, that means benefits like booking multiple rooms, interconnecting rooms, ancillary products, and so forth.”

He is also focused on AI solutions that will help personalize the content and make it more relevant to agents. For example, if a hotel is sold out, Sabre’s Lodging AI will be able to recommend nearby alternatives based on the client’s profile and shopping patterns. If an agent books air but not a hotel, it could make similarly relevant recommendations. For a corporate travel agency, it could recommend hotels that are part of the travel program and under a certain rate ceiling.

That would help with another issue I’ve heard about from travel advisors: That Sabre’s data can be overwhelming, and agents spend a lot of time sifting through hundreds of rates to find the one they need. “Delivering more meaningful results is one of the biggest initiatives that we're working on,” says Chinmai, “because hotels have multiple rate types and room types and product types, and when you start aggregating hotels across various sources, it complicates the problem even more.

So how do you give bite-sized information to the travel advisor so that it makes sense? It’s not completely solved but we will continue to add more layers of technology on top of that.” That also means evolving from an interface of sometimes cryptic commands to one that is more graphical and allows for better merchandising. And it means providing content that today’s travel advisor wants and needs, everything from user-generated reviews to videos to carbon footprint information.

Admittedly, I’m not in a position to judge whether Chinmai and Sabre can really solve all of these problems effectively. But I do salute their dedication to modernizing the travel industry’s underlying infrastructure, which is critical if we want to continue to attract younger, tech-savvy customers and employees.

"I think that our industry has been reluctant to change mainly because both the owners of agencies and the advisors have traditionally been older,” says Waldon. “I'm actually benefiting from agencies not willing to advance, because I'm attracting advisors who are multimillion-dollar producers but want better compensation, better technology, and better culture.” With the median age of travel advisors in the U.S. a startling 61, adopting up-to-the-minute technology is critical to solving the agent community’s hiring challenges.

Peter Vlitas, who as Executive Vice President for Partner Relations at Internova has extensive insights into NDC and its impact, doesn’t believe that the airlines are trying to cut travel agents out of the equation. For one thing, he says, they’re agnostic as to where their products are sold; for another, they prefer agents to service those sales rather than have their own people do it. He also believes Sabre and its peers will catch up quickly: “The future of the GDS is secured, as long as they can rapidly develop the tools we need to keep up with the pace of what some of the airlines are doing. They’re getting closer and closer, and they’re moving as fast as they can.”

That said, he sees this moment as a wake-up call for travel agents to catch up to the latest technology, and I agree. “I think that no small agency can survive going forward by itself,” Vlitas told me. “Their costs are going to increase, their revenues are going to decrease, and they will have to join a consortium or host agency that can invest in this new technology.” Most important, there’s no more postponing the inevitable. “The sooner you learn about this, the sooner you talk to your GDS and your airlines and look at the options, the sooner you will shift to the new world,” Vlitas said. “You have no more time. You have to start this journey.”

Do you see Sabre providing cutting-edge tech to deal with NDC and other alternate sources of content? Will some as-yet-unknown startup rise to take its place? Do you agree with Vlitas’s prediction of travel agency consolidation? I’m curious to hear about your experience with Sabre and other GDS’s, what you love and/or hate about them, and where you think the future might take us. Let’s keep the conversation going!

Peter J. Bates, President & Founder

Founded in 1998, Strategic Vision is a New York-based global marketing and communications firm offering a range of integrated sales, marketing and consulting services for leaders in the luxury lifestyle, travel, hospitality and event industries.

The consultancy specializes in developing and executing strategies that keep up with the pace of the luxury marketplace transformation. Whether raising the profile of brands, identifying the right affluent customers, identifying new revenue streams or optimizing current business models – our focus is always on achieving meaningful results with every engagement.


Global Brand Awareness & Marketing Tools at 4Hoteliers.com ...[Click for More]
 Latest News  (Click title to read article)

 Latest Articles  (Click title to read)

 Most Read Articles  (Click title to read)

~ Important Notice ~
Articles appearing on 4Hoteliers contain copyright material. They are meant for your personal use and may not be reproduced or redistributed. While 4Hoteliers makes every effort to ensure accuracy, we can not be held responsible for the content nor the views expressed, which may not necessarily be those of either the original author or 4Hoteliers or its agents.
© Copyright 4Hoteliers 2001-2024 ~ unless stated otherwise, all rights reserved.
You can read more about 4Hoteliers and our company here
Use of this web site is subject to our
terms & conditions of service and privacy policy